Above: Click to see high-res version, of the 10 Corporate Innovation Programs
Recently, at Crowd Companies, we published a research report on the Corporate Innovation Imperative (short version available on Slideshare), and found that companies are struggling internally with cultural pushback, but they’ve launched over ten innovation programs to help large companies become nimble. This handy graphic, is organized in the following way:
- It lists all ten innovation programs that companies are launching. Keep in mind, many companies are deploying several, but few are doing them all well. In our full report for customers, we have adoption and budget details.
- They’re organized with the center programs being internal programs, and the outside circle are programs that are partnering with the external ecosystem, often with startups.
- Descriptions are provided on the top and bottom of the graphic, to help bring to life the various programs. Often people are most intrigued by the Intrepreneur Program or Open Innovation programs.
Thank you Jaimy Szymanski and Vlad Mirkovic for their assistance on this project. Also, we’re conducting a few followup reports on Corporate Innovation Metrics, processes, and internal organizational models. Contact me at jeremiah at CrowdCompanies.com if you know of a large company we should interview, or a vendor that’s helping with these goals.
Do you have proven success measures for your corporate innovation programs? If so, we’d like to interview you for an upcoming Crowd Companies report that I’m working on with Jaimy Szymanski
The report will showcase how companies are measuring success for each of the 10 corporate innovation programs established in previous Crowd Companies research. Looking internally and externally, we’ll examine how companies are determining the right objectives and key performance indicators (KPIs) to align innovation program efforts with over-arching corporate and departmental goals.
This research will also delve into the challenges faced in measuring success, software and other tactics used for data analysis, and provide recommendations for aligning current digital, customer service, and product development metrics to fit with innovation programs. Readers will finish the report with a better understanding of how their innovation program(s) can contribute to greater, measurable organizational growth.
Interviews last approximately 30 minutes, and nothing will be shared without your approval. The report will be available in full to Crowd Companies members, and partially to the public.
Ideal interview candidates fulfill one or more of the following criteria:
- Be in an innovation position (senior leadership preferred) at a large corporation, or otherwise contribute to company business model changes,
- Ideate new products or features, or improvements to existing products and services,
- Build new customer experiences brought forth by disruptive technologies,
- Responsible for strategy and execution of one or more corporate innovation programs, internal or external,
Do you fit the bill? Please email me at Jeremiah@CrowdCompanies.com for more information. Thank you in advance for contributing to our research that will benefit all corporate innovators.
Photo via Pexels
By Jeremiah Owyang and Jaimy Szymanski
Corporations are struggling to keep pace with technology trends, but the real innovation challenge lies in their internal culture. In other words? The “tech issue” isn’t an issue! According to our recent survey, the top challenge companies face in corporate innovation is fostering an internal culture of experimentation and innovation (57%).
Truly innovative companies focus on setting a foundation with the right people and empowering them, as well as governance, before large investments take place that lack direction, resources, or goals. These corporations are diversifying their hiring strategies in the face of rapidly disruptive technologies, consumer adoption of related trends, and the advent of new business models that emerge from the two. In order to remain competitive in an environment that embraces rapid startup innovation, corporations must focus both internally (on existing talent) and externally (on acquiring new talent) to build their talent pools.
In our latest Crowd Companies report available on Slideshare, “The Corporate Innovation Imperative: How Large Corporations Avoid Disruption by Strengthening Their Ecosystem,” we uncovered three distinct manners in which the most mature corporations approach hiring innovative employees: Intrapreneurship Programs; Technology Education / University Partnerships; and Startup Acquisitions. In the full report available to Crowd Companies members, you’ll also find case examples from corporations that have found success.
Internal employees — dubbed “intrapreneurs” — are given a platform and resources to innovate. These programs invest in employees’ ideas and passions to unlock everything from customer experience improvements to product enhancements and full-blown internal startups that are then launched from within the company. Intrapreneurship programs are an effective and cost-efficient way to surface ideas and shape your business without the need to purchase expensive startups or hire external talent or vendors. They enable rank-and-file employees to contribute to a culture of innovation.
Technology Education / University Partnership
Through an educational partnership, corporations can tap into new university graduates, early-stage projects and companies, and the network of an established educational institution. In addition to traditional universities, there are new private versions opening up that are dedicated solely to technology training, like Galvanize and General Assembly. Partnering with educational institutions provides corporations with a first look at breaking technologies and how they’ll impact our culture through an academic lens. These partnerships are an effective way to secure new talent about to enter the marketplace.
Rather than build innovation from the inside, some corporations acquire successful startups and integrate. While expensive, the startup is often already successful, and the acquisition can help the startup scale further. Acquiring startups showcases a corporation’s focus on the future and evolving its products, services, and customer experiences to meet new expectations. Stanford also shared with us that some companies experiencing a hard time hiring software talent have used “acqui-hiring” to bring people into the company. It can be a useful way to acquire talented employees along with new technologies.
Advanced Companies Focus on People Before Programs
Corporations that retool their hiring strategy to meet the evolving talent needs of their innovation programs will reap the rewards of crafting an innovation team (or “center of excellence”) that has the expertise, experience, and drive to incite change. Our survey also uncovered that dedicated innovation teams (79%), innovation centers of excellence (61%), and technology education / university partnerships (54%) are the most commonly deployed corporate innovation programs (see figure below). This shows that companies are first focusing internally on building the right teams, getting governance and processes in place, and educating current and new employees on emerging technologies before spending time and resources on rolling out external programs or investing in the startup scene.
Other best practices from advanced organizations include:
- Mature corporations understand that an innovation program is only as good as the employees behind it. Follow in the footsteps of corporations like Verizon, which have multiple innovation teams in various business units, each with talented members dedicated to both ideation and execution. This helps them move efficiently to prototype and launch new innovations.
- Also focus on talent retention, as there’s a commonplace and ever-present threat that your best and brightest will be poached (or, at the very least, approached) by competing corporations or startups. Leaders at mature organizations consistently ask themselves, “Are we doing enough to keep our most innovative employees happy?” The most effective incentives tie employee progress on innovation KPIs directly to pay structure.
- Finally, we found that the most advanced companies receive a dedicated budget from the CEO to ensure company-wide support of innovation as a long-lasting cultural mandate––even if the company is not performing well financially.
In our research on corporate innovation, we found the most advanced companies allow competitors to innovate in their own buildings.
Johnson & Johnson Innovation, JLABS enables outside innovation inside the company. As a result, they’re improving the entire industry, including efforts of competitors, in order to positively impact society as a whole.
Above: Crowd Companies’ Carl Bohlin addresses the council on our tour to JLABs in SF.
At its nine sites within North America, JLABS gives startups the tools they need to level the playing field against large, corporate R&D teams. Half of each JLABS space is a common area with state-of-the-art equipment for use, while the other half is comprised of individual labs that help companies get started. JLABS is all new space, not old storage or “leftover” labs, and the facilities are separate and distinct from Johnson & Johnson corporate with no Janssen scientists working there.
The Crowd Companies team was privileged to tour one of the JLABS sites earlier this year, bearing witness to how Johnson & Johnson Innovation is breaking the mold in a big way. During our tour, dinner, and discussion at JLABS in South San Francisco , we found that the culture as a whole is diametrically opposite normal business behavior by inviting anyone into their space in order to innovate and advance specific medicines, medical devices and consumer & digital health solutions.
The concept of JLABS sprouted from a need when JLABS leader Melinda Richter suffered a near fatal medical emergency while traveling internationally, see her TED talk. She made a promise that, if she survived, she would do something to enhance medical efficiency and bring solutions to patients faster and better. From there, JLABS was born and sold to executives. It is now thriving under Richter’s leadership.
JLABS provides their space and tools onsite with no vested interest. Startups and innovators onsite have complete privacy to work without any sharing of IP. Security cameras are not even allowed to be directed where work is being conducted, and participants are encouraged to clean whiteboards after using. If it is presented with an idea of potential, Johnson & Johnson Innovation often pursues deeper partnerships that allow it to shape the ultimate innovation or product at a later date.
JLABS measures its success based on internal financial metrics, quality of innovators coming in, quality of science and technology being developed, development milestones reached, the number of people using its space, and education programs run.
Crowd Companies identifies the JLABS approach to innovation as an advanced program, as it not only benefits the company but also the entire industry. “Common tides raise all boats” in innovation, and Johnson & Johnson Innovation understands that their scientists will only be pushed further toward greatness if up against the best minds, with adequate resources, in the industry.
Our recent research on Corporate Innovation Programs (download the high level version) found that companies are attempting to act more nimble and agile by deploying a combination of these innovation programs. Frequency varies, and budgets are skewed around Startup Acquisition, being the bulk of the investment. Corporations are taking pages from startups, to emulate the culture of a fast-moving smaller company.
This list is structured in a logical way: The items listed on the top are happening inside of the company, while the items towards the bottom happen outside of the company. This is not a list that you should automatically approach as a checklist as the order of deployment will vary. For example, some companies have corporate development teams only, that solely exist to acquire startups –rarely to derive innovation from internal teams.
- Dedicated Innovation Team
Corporations often start by staffing an innovation team within the company, which is comprised
￼of both full- and part-time employees dedicated to developing strategy, managing, and activating innovation programs. These leaders are experts at internal communications and are proven change agents. Centralized teams deploy on behalf of the business units, and often act as a governing body when deployed on a global/cross-functional scale to manage multiple innovation team strategies.
- Innovation Center of Excellence
Innovation Centers of Excellence (CoE) enable innovation across multiple departments within the
￼company, and members serving on the CoE are also responsible for senior leadership within various corporate groups. Common departments included in the CoE are marketing/digital, PR, legal, HR, IT, and product. The goal of the CoE is to standardize and scale innovation across the company, providing guidance to efforts that do not yet have dedicated teams or leadership.
- Intrapreneur Program
Rather than rely solely on external programs, internal employees — dubbed “intrapreneurs” — are
￼given a platform and resources to innovate. These programs invest in employees’ ideas and passions to unlock everything from customer experience improvements to product enhancements and full-blown internal startups that are then launched from within the company.
- Open Innovation (Hackathon or Internal Incubator)
Hosted inside a corporate office, large corporations invite startups to embed at their physical locations
￼and “incubate” them with funding, corporate support, and other perks. This can also take the form of overnight hackathons, demo days, and online open-innovation programs/contests that request — and often reward — ideas from the crowd.
- Innovation Excursions
Frequently, inspiration comes from outside, not within. Corporate leaders tour innovative
￼organizations, companies, and regions (in Silicon Valley and other relevant tech hubs) to discover trends in various industries, learn from speakers, meet partners, and be inspired as they immerse themselves in innovation culture.
- Innovation Outpost
An innovation outpost is a dedicated physical office, in Silicon Valley or wherever innovation
￼happens in a corporation’s key market(s), staffed with professionals whose job is to sense current trends and disruptive technologies, connect with local startups, and integrate programs back into corporate headquarters. Some innovation outposts are host to partners, events, and startups, thereby overlapping into internal accelerator territory. An innovation outpost is typically managed by employees, unlike an external accelerator, which is run by a third party.
- Technology Education / University Partnership
Through an educational partnership, corporations can tap into new university graduates, early-stage
￼projects and companies, and the network of an established educational institution. In addition to traditional universities, there are new private versions opening up that are dedicated solely to technology training, like Galvanize and General Assembly.
- Accelerator Partnership
Corporations partner with third-party accelerators to provide sponsorship and/or funding in
￼exchange for relationships with startups and integration opportunities. Corporate innovation professionals often embed themselves in accelerator offices, fostering relationships with local startups. These external accelerators are run entirely by vendors (investors, advisors, etc.), unlike innovation outposts, which are managed by employees.
- Startup Investment
Corporations place bets among the startup ecosystem, with both small investments for early-stage
￼startups and larger amounts of corporate funding that yield market data, create opportunities for follow-on investments, and block competitors. Intel Capital is a recognized leader in corporate investing, raising $1.28 billion in funds and making 1,094 investments in 769 tech companies to date.
- Startup Acquisition
Rather than build innovation from the inside, corporations acquire successful startups and integrate. While expensive, the startup is often already successful, and the acquisition can help the startup
scale further. According to recent studies cited by Global Corporate Venturing, only 5% of corporate venture capital (CVC)-financed startups are acquired by the backing parent corporations.3 A new study from MassChallenge also reveals that 23% of corporations see working with startups as “mission critical,” and 67% say they want to work with earlier-stage startups.
Which program is best for every company? We didn’t find a silver bullet for all, as it varies on the innovation goals and culture. For example, some cultures are open to employee feedback, and thus an intranpreneurship program makes more sense. However, in some cases, working with outside companies is easiest, so partnering through accelerators or investing in startups is more sensible. Want to know more? Download the report.
Though there are many ways to approach innovation, the majority of companies focus on building innovation teams or “Innovation centers of excellence,” as well as fostering internal education, before moving toward external deployments.
In Crowd Companies’ recent report, The Corporate Innovation Imperative (download here), we identify 10 types of innovation programs corporations pursue when looking to evolve their business models, customer experiences, operations, or products and services. More on the 10 programs can be found here. We discovered that corporations often excel in one program initially, then add programs to their innovation portfolio as they mature and are able to justify related expenditures.
And, where do they begin? With their own teams. Through our survey, we found that dedicated innovation teams (79%), innovation “centers of excellence” (61%), and technology education / university partnerships (54%) are the most commonly deployed corporate innovation programs (see figure below). This shows that companies are first focusing internally on building the right teams, getting governance and processes in place, and educating current and new employees on emerging technologies before spending time and resources on rolling out external programs or investing in the startup scene.
Frequency of Corporate Innovation Programs
One way corporations are focusing on building strong teams is by involving cross-departmental constituents in their efforts. This smooths the path to internal acceptance and adoption as advocates are in every corner of the organization.
Much of the success of innovation teams depends on internal alignment among tangential departments, like legal and marketing, to move from ideation through implementation. Verizon recommends bringing new ideas and developments to lawyers early, who can help obtain and protect intellectual property rights in a fast-changing global legal landscape. Innovation teams should also have their own marketing and PR resources, as Mastercard Labs does, to socialize ideas internally and externally, when appropriate, pick up sponsorship, build momentum, and identify pilot customers. Mastercard Labs also produces its own 60-second “pitch” videos for each idea that makes it to prototype, as an easy way to promote viral sharing within the company.
How is your company approaching corporate innovation? Are you looking to build teams and foster education before looking outward to bolster innovation?